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A great Harvard Business Review article exposes how valuable women’s external relationships are to business performance

I was collating some research the other day and again reviewed the article, How Star Women Build Portable Skills which is always a good read as it shows that star performers often falter when they move to new companies, but not women. While this article focuses on analysts, I thought you may find some similarities in your business regardless of the industry. There were 4 key reasons why firms acquiring male stars experienced a significant share-price loss of 0.93%, whereas the acquisitions of female stars generated a non-significant share-price increase of 0.07%:

1. Women build their franchises on portable, external relationships with clients, whereas men tend to invest more time in building internal networks with colleagues. One reason for women focusing on outward relationships is in an effort to avoid the internal affiliations and power structure within a male-dominant firm.
2. Women take greater care when assessing a prospective employer to ensure their cultural fit. They look at factors such as access to role models and the existence of female colleagues.
3. Poor in house mentorship for women causes women to look outside the company for support. As a consequence they miss out on one of the most valuable services a mentor provides: access to a network of company specific relationships.
4. Firms tend to lay off more women than men during economic contractions. Although women accounted for just 21% of Wall Street analysts in 1986, they represented 64% of those who were let go following the 1987 crash. So building external relationships is a strategic move to ensure easy access to move into other firms.

It seems that women build external relationships to counterbalance internal disadvantages. But this is not such a bad thing after all! Not only does it improve women’s portability between firms but it boosts their reputation with colleagues.

If you want to read the full article you can access it by clicking here.


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